Guidance

Early years pupil premium: guide for local authorities

Updated 6 March 2025

Applies to England

Introduction 

This is non-statutory guidance setting out Department for Education (DfE) expectations for how local authorities should use early years pupil premium (EYPP) funding for the financial year beginning April 2025. The funding is paid to local authorities through the dedicated schools grant (DSG).

This guidance is intended to support local authorities. DfE does not expect local authorities to make significant changes where they have suitable monitoring arrangements in place.  

EYPP rates and detailed eligibility criteria for the 2025 to 2026 financial year are set out in section 9 of the  funding operational guide. 

The purpose of EYPP is to improve the educational outcomes of socio-economically disadvantaged children who are eligible for free early years entitlements in an early years setting.  

Local authorities are responsible for paying EYPP to early years settings. Most require a parent or carer to inform them if they think their child is eligible. Local authorities are responsible for checking eligibility and should use the eligibility checking service to do this.  

DfE provides a parental declaration form that early years settings may use. It includes a section on parental consent for early years settings and local authorities to check eligibility for EYPP.

Eligibility 

Children are eligible for EYPP if they receive at least one hour of free early years entitlements provision and their parent or carer receives one or more of the following benefits: 

• Income Support 

• income-based Jobseeker’s Allowance 

• income-related Employment and Support Allowance 

• support under part 6 of the Immigration and Asylum Act 1999 

• the guaranteed element of  Pension Credit 

• Child Tax Credit if the parent or carer is not also entitled to Working Tax Credit and has an annual gross income of less than £16,190 

• Working Tax Credit run-on, which is paid for 4 weeks after a claimant stops qualifying for Working Tax Credit 

• Universal Credit, if the parent or carer’s annual net household income is less than £7,400, not including any benefits

If the child was formerly looked after by a local authority in England or Wales through adoption, a special guardianship order or a child arrangements order, they are also eligible.

Age	EYPP entitlement
9-month-olds to 2-year-olds	Payable on the working parent entitlement
2-year-olds	Payable on either the entitlement for families in receipt of additional support or the working parent entitlement. Should be paid against the former first, if the child is eligible
3- and 4-year-olds	Payable on the universal 15 hours’ entitlement only

For children who meet the income eligibility criteria, EYPP is paid per hour of early education entitlement they receive.  

A child who is currently being looked after by a local authority in England or Wales and receives at least one hour of free early years entitlement provision is also eligible for EYPP. For these children, local authorities are required to pay EYPP for the full 570 hours per year, regardless of the number of hours of free early years entitlements the child receives. See Section 9 of the funding operational guide.

Use of EYPP funding  

This guidance is intended to support local authorities to understand how EYPP should be used by providers to support children’s learning. The following considerations may help them decide on the information, guidance and training they offer those providers. 

Settings should use EYPP alongside any other available funding streams or support to deliver interventions that improve outcomes for disadvantaged children.  

Early years settings should ensure EYPP funding is used to improve educational outcomes for disadvantaged children by spending on activities, staff training and resources that specifically impact educational outcomes for disadvantaged children. They should plan EYPP spending based on consideration of well-evidenced approaches such as professional development for staff, which may benefit all children while providing the greatest benefit to disadvantaged children.

Recommended spending approaches are set out in the Education Endowment Foundation (EEF) Guide to the Early Years Pupil Premium. This offers practical, evidence-informed advice for setting leaders on maximising the use of EYPP in their context.

Early years settings should spend EYPP funding in full within the academic year for which it has been allocated.  

Supporting early years settings to make best use of EYPP

To ensure EYPP funding is spent on activities that meet the objective of improving outcomes for socio-economically disadvantaged children, early years settings should plan their spending based on well-evidenced approaches and interventions, alongside knowledge of the context and needs of children at the setting. 

The EEF Guide offers step-by-step guidance on how to spend EYPP effectively. It also recommends a range of spending choices, in line with evidence, on approaches to improving outcomes for disadvantaged children.

The guide recommends that settings take a balanced approach, using EYPP to:

• develop quality practice
• tailor personalised support
• lead, plan and sustain a strategy

Develop quality practice

High-quality education and care are important for all children, but the benefits for socio-economically disadvantaged children are greater. Settings can continue to develop quality practice through effective professional development. When deciding which professional development is most appropriate for a specific setting, it’s important to prioritise evidence-informed approaches.

Settings could use EYPP to:

• introduce a professional development programme
• purchase evidence-informed professional development
• design and deliver training

Tailor personalised support

Some disadvantaged children will need additional support and teaching to ensure they make strong progress. As educators develop strategies that are positive for those who need extra support, they also develop practices that are positive for every child.

For example, settings could use EYPP to:

• buy a robust assessment tool
• offer personalised support to disadvantaged children

Lead, plan and sustain a strategy

Leadership is key to planning and sustaining a strategy that narrows the learning gap. Spending EYPP effectively is not a one-off event but an ongoing process that can adapt and respond to both context and the strengths and needs of socio-economically disadvantaged children.

For example, settings could use EYPP to:

• access support
• take time to plan, monitor and sustain their strategy
• work with other settings

Alongside recommendations for spending across the components of the balanced approach, the EEF Guide offers practical examples of what these recommendations could look like in action.

Early years stronger practice hubs also offer support on evidence-informed practice and, through their networks, proactively share information and advice with practitioners and settings. 

Local authorities can offer guidance, support and signposting on the effective use of EYPP, responsive to local context and need.  

Accountability  

During an inspection, Ofsted will evaluate the quality of provision and consider:

• how effective the setting is at identifying children eligible for funding for disadvantage
• the decisions that leaders take about supporting those children’s needs
• how well children are supported
• the impact on disadvantaged children

Local authorities are required to ensure early years settings use looked-after children EYPP in line with the directions of the local authority’s virtual schools head and the child’s personal education plan. 

DfE will keep this guidance under review and will amend and update it to ensure that EYPP spend is being maximised on interventions that support improvements in children’s educational outcomes.